ImpactAlpha, July 6 — Miami-based fintech startup OppZo has raised $260 million to provide up to $1 million in asset-based working capital loans to small and medium-sized businesses in Opportunity Zones. Its initial target is businesses with government contracts.
Borrowers can secure loans for rates as low as 8% for up to 18 months, with no personal guarantees. Investors and local banks, meanwhile, can hand pick distressed communities where small businesses are struggling to access capital.
The company’s mission is “to build thriving communities,” said OppZo’s Warren Reed. “We understand first hand the impacts of disparity in funding, and we’re delivering the optimal solution to the market.”
Arcadia Funds led both the $5 million equity and $255 million debt portions. The investment will be used to tap into new private and public capital sources for small businesses in distressed communities, “by focusing on building relationships and understanding first,” said OppZo’s Randy Garrett.
The company says it has secured nearly $1.3 billion to fund the loans, and has a pipeline of more than 2,000 small business borrowers.